The government has allowed Sony Entertainment Television to acquire SET Satellite Singapore and hike its total foreign shareholding to about 90 per cent.
SET India, in which Sony Entertainment Pictures holds 64.5 per cent stake, plans to acquire 100 per cent of SET Satellite Singapore through a share-swap deal, sources said.
The acquisition will not involve outflow of foreign exchange from India, sources said.
On its part, the information and broadcasting ministry raised no objections to SET India's plan except asking it to adhere to the broadcasting laws, not undertake broadcasting from Indian soil unless specifically permitted and observing equity limits as prescribed for the electronic media.
"The company wants to develop into an international centre for entertainment and media designed to popularise Indian culture, language and traditions to the Indian Diaspora located around the world. To achieve this objective the company has sought approval for an internal restructuring," sources said.
According to the proposal that SET India has submitted to the Foreign Investment Promotion Board, it plans to first purchase 100 per cent of the equity shares of SET Singapore pursuant to the share-swap against the allotment of shares of SET India in the ratio of 1:16 SET India shares to SET Singapore shares, sources said.
Then it plans to issue shares of SET India as per the share-swap. The issuance of SET India shares to new shareholders in SET India would be done so that SPE Singapore will be allotted 2.536 million shares comprising 37.9 per cent of SET India's equity.
These shares will be simultaneously transferred to SPE Mauritius Holdings and SPE Mauritius Investments, both wholly owned subsidiaries of SPE Singapore and existing percentage ownership interests.
Besides, Mauritian Overseas Commercial Body Grandway Global holdings is to be allotted 1.324 million SET India shares, which means 19.83 per cent of the company's equity.
SET India has said the proposal is supported by a board resolution and a declaration under Press Note 18 by Grandway Global.
